Happy President’s Day! What Our Forefathers Thought About Taxes

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Did you know that President’s Day was not always celebrated on the third Monday of the month?

Originally established in 1885 to honor President George Washington, this holiday was set on Washington’s actual birthday, February 22nd. The date swap happened in 1971 during the Uniform Monday Holiday Act – a move by Congress to give US workers more three-day weekends. Today, this Monday holiday is commonly viewed as a date to celebrate all US presidents.

To celebrate the holiday’s 130th birthday today, let’s take a look back at what George Washington and Abraham Lincoln really thought of taxes.

George Washington, First President of the United States

President Washington knew that it was the government’s responsibility to pay down debts. But taxes needed to exist in order to pay off this debt. Washington also realized a balance needed to exist for how taxes are enforced.

In his own words: “…it is essential that you should practically bear in mind that towards the payment of debts there must be revenue; that to have revenue there must be taxes; that no taxes can be devised which are not more or less inconvenient and unpleasant.”

Abraham Lincoln, Sixteenth President of the United States

President Lincoln was the first ever to impose a federal income tax. On August 5, 1861, in an effort to finance the Civil War, Lincoln signed the Revenue Act. This tax imposed a 3% tax on annual incomes over $800.

In letters to cabinet members, Lincoln questioned if the President had constitutional authority to “collect [such] duties.” He was especially worried about collecting taxes from southeastern regions – which might have fallen under the control of the Confederacy.

What ever happened to Lincoln’s tax law? Congress repealed it in 1871. But with the passage of the 16th Amendment in 1909, the federal income-tax system we use today was set in place.

This Presidents Day, raise a toast to the wise words of our founding fathers and take a moment to reflect upon the long history of taxation in the US!

 

 

 

 

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